January 07, 2014

"[T]here are three kinds of falsehoods, lies, damned lies and statistics" according to the late Arthur James Balfour, a former Prime Minister of the United Kingdom, as quoted in the Manchester Guardian, June 29, 1892.

Consequently, when the Centers for Medicare & Medicaid Services (CMS), one the federal government agencies most responsible for Patient Protection and Affordable Care Act (ACA) compliance and administration, publishes new statistical data suggesting "ObamaCare" is helping reduce health care spending, one would expect that statistical data to be reviewed sceptically, if at all, by Republicans.

Surprisingly, however, the Republican-friendly Wall Street Journal featured an oped article (subscription required) this past Monday written by Jason Furman, Chairman of the White House Council of Economic Advisers, and titled "ObamaCare is Slowing Health Inflation".

Furman's article highlights the new CMS statistical data which he attributes, in part, to the ACA: "From 2010 to 2012, health spending grew at an annual rate of just 1.1% in real per capita terms—the lowest rate in the 50 years we have been collecting these data, and a small fraction of the 6% rate that inaugurated the past decade."

Furman believes lack of public attention to lower health care inflation results from the perception it is merely a "transitory byproduct of the Great Recession". As the economy continues to recover, however, he maintains other factors, including the ACA, are contributing to this good news.

Furman's article also challenges critics who claimed the ACA would be a "job killer." He maintains the 7.9 million private jobs added to the U.S. economy since 2010 should by themselves disprove this claim. Furman also references a 2010 study, co-authored by economist David Cutler, which estimates health-care reform could boost job growth by 250,000 to 400,000 a year later this decade and result in higher wages as the anticipated slowdown in healthcare costs are passed through to workers.

As additional evidence of the ACA's positive economic impact, Furman highlights Congressional Budget Office (CBO) projections. CBO has reduced its estimate for Medicare and Medicaid spending in 2020 by approximately 10% since its earlier 2010 estimate, according to Furman, and has also projected the ACA will increasingly contribute to deficit reduction.

"Correcting Misinformed Conservatives"

Furman was not alone this week in publicly proposing ACA reforms are working. In a January 6 blog post , liberal political columnist Jonathan Chait summarily quotes the following health care experts to support his contention that "since Obamacare’s passage, conservatives have gone from arguing that Obamacare will absolutely cause health-care costs to rise to insisting that the decline in health-care costs has absolutely nothing to do with Obamacare":

“The ongoing slowdown in the health-care growth rate defies historical post-­recession patterns and is likely to be ­sustained,” concluded Price­water­house­Coopers in June. “It appears that the reforms will stick and health-care exchanges and other policies will bring competitive pressure to markets,” says Randall Ellis, a professor of health-care economics. “Although the proof for this point of view is not yet definitive,” reports the Health Affairs blog, “the depth and breadth of change suggest that significant transformation in the nation’s delivery system is under way.”

Chait acknowledges: "[i]t's possible the slowdown [in health care inflation] is mostly or even entirely coincidental. But the evidence is certainly consistent,"Chait continues,"with the premise that Obamacare’s payment reforms have prompted the changes occurring in American medicine. I have yet to see any conservatives anywhere open themselves even to the remote possibility that Obamacare’s cost controls might not fail."

By publishing Furman's ACA oped featuring CMS statistical data, The Wall Street Journal may have initiated a new Republican paradigm for ObamaCare.